Jack Ma-backed Ant profit falls 56pc amid overhaul

ANT Group Co.’s quarterly profit fell 56 percent as the fintech giant shifted its focus from expansion to regulatory compliance, and the company saw a decrease in investment gains.

The Hangzhou-based company contributed nearly 3.18 billion yuan (US$452 million) in profit to Alibaba Group Holding in the three months ended December 31, a filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 9.6 billion yuan in profit for Ant. That compares with an 83 percent fall in the previous quarter. Ant’s earnings lag a quarter behind Alibaba’s.

The company declined to comment in an emailed statement.

Ant is waiting for a financial holding company license, more than two years after authorities torpedoed its planned initial public offering. The company’s valuation was trimmed by Fidelity Investments again to US$63.8 billion as of November, far below its peak of US$235 billion.

Billionaire Jack Ma, who has largely remained out of public sight in recent years, has said he will cede control of the company amid a broader retreat. He returned to China in March after a long period of staying overseas.

In signs of progress, regulators recently allowed Ant’s consumer lending affiliate to increase capital. The Communist Party chief of Hangzhou in January praised the company for following its leadership, marking a softening stance toward the firm that was once controlled by Ma.

Ant Chairman Eric Jing highlighted the support private companies are receiving from the government in a February state-media report. He stressed that “the country hasn’t changed its stance or level of support for the private economy,” and that the government expects platform operations to continue to create jobs and compete internationally.

In a filing in July last year, Alibaba reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a percentage that doesn’t exceed 8.8 percent.